New at Reason.com: The Public-Sector Pension Timebomb, China's Looming Real Estate Bubble, Does the Constitution Protect the Right to Earn A Living? and More

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Reason.tv: If You Think Your State Is Broke Now, Just Wait Until the Public-Sector Pension Bomb Detonates! Unless you've been pulling a Rip Van Winkle for the past few years, you know that your state is more busted than Larry Craig in an airport toilet. The only possible exception is the state of Denial, and it closed its borders to new arrivals sometime in late 2008. One of the main drivers of this sorry state of affairs is the massive disparity between public-sector and private-sector compensation, especially when it comes to benefits such as pensions. Various studies have found anywhere between a 70 percent and a 34 percent differential in total compensation, with public-sector employees getting not just more pay and benefits but near-absolute job security and early retirement. There is a solution to this mess, the same solution that has been adopted by the private sector over the past several decades: switching from defined-benefit retirement plans to 401(k)-style defined-contribution plans. In a state such as Ohio, which is facing a $8 billion budget deficit and where state and local employees earn about 34 percent more in total compensation than their private-sector counterparts, bringing public-sector compensation into line with the private sector would cut the state's deficit by about 28 percent. The alternative? Well, there isn't really one, other than destroying your state's economy. Click here to watch. China's Looming Real-Estate Bubble: A massive Keynesian spending program has misallocated capital and set the stage for a crisis. American enthusiasts of more stimulus have been urging this country to look to China for guidance on how to beat a recession. As they see it, while our politicians debated and dithered and fell short, China's wise autocrats moved quickly to inject a massive stimulus and restore robust growth. But as Shikha Dalmia and Anthony Randazzo explain, China's massive Keynesian spending program has misallocated capitol and set the stage for a crisis. http://reason.com/archives/2010/08/27/chinas-looming-real-estate-bub Join Nick Gillespie, Matt Welch, Ron Bailey, and Jacob Sullum on Reason's weeklong Caribbean cruise in February 2011. Sign up today!   http://www.reasoncruise.com Taking Economic Liberty Seriously: Does the Constitution protect the right to earn a living? Since the 1934 case of Nebbia v. New York, where the Supreme Court branded shopkeeper Leo Nebbia a criminal for selling milk at less than 9 cents a quart, the courts have provided almost no meaningful protection for economic liberty. Associate Editor Damon Root explains why this sorry state of affairs violates the text and history of the U.S. Constitution and contradicts five centuries of Anglo-American legal precedent. http://reason.com/archives/2010/08/26/taking-economic-liberty-seriou Hit & Run, Reason's Staff Blog Affordable Housing Is Not a Crime Now that you've wiped away yesterday's tears and begun to accept that sales of overpriced U.S. real estate have again slumped, Mike Riggs says it's time to turn that frown upside down. At the Daily Caller, Riggs, (a former Burton C. Gray Memorial Intern for Reason) swings one fist labeled "Tim Cavanaugh" and another one labeled "Jim the Realtor" and knocks the air out of calls for more government support to a housing market that is returning to balance after nearly a decade of hyperinflation... Read the rest here. Posted by Tim Cavanaugh http://reason.com/blog/2010/08/27/affordable-housing-is-not-a-cr Daily Brickbat Worth Every Penny In 1986, Annemarie Dubois took a leave of absence from Peabody Veterans Memorial High School in Massachusetts to work for the American Federation of Teachers. She renewed that leave and continued to work for the AFT for the next 24 years. Now, when she's ready to retire, and under the union's agreement with the school system, she'll be paid a full pension just as if she'd actually been working in the school. School officials say they couldn't deny her requests for a leave of absence. That, too, was in the contract. http://www.reason.com/brickbat/ Try Reason's award-winning print edition today! Your first issue is FREE if you are not completely satisfied. http://www.reason.com/subscribe

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